I had the pleasure of interviewing Matt Mitro, CEO of Indego Africa yesterday afternoon.  We had a wide-ranging discussion covering everything from his initial funding efforts, to establishing partnerships with local organizations on the ground, to that gut feeling that just wouldn’t go away when working as an attorney before starting Indego Africa, to the importance of personal and professional networks in working to bring about change.

About Indego Africa:  Indego Africa is an organization at the forefront of empowering women in Rwanda in handicraft work by providing exceptional market access, skills training, and capacity building.  Through his team’s work, Indego aims to drastically raise living standards for women in Rwanda, encourage development, and bring these women a sense of accomplishment that is well-earned.  100% of Indego Africa’s profits are re-invested in the women and in Rwanda.  Learn more about them at IndegoAfrica.org.

And now, our interview in its entirety:

Matt, welcome and thank you for your time.  For the purposes of our interview, can you please state your name and occupation?

Thank you for having me.  I’m Matt Mitro, Chief Executive of Indego Africa.

So Matt.  It seems that every entrepreneur starts with a problem they want to solve.  What was the problem that led you to form Indego Africa?

It was sort of a macro- and micro-problem I was seeing.  Traditional aid programs weren’t necessarily working for the people they were supposed to help.  They weren’t creating appropriate incentives to help people help themselves learn, and that should be the long-term goal.  Instead, traditional development aid often creates a relationship of dependence.

We see this with manufacturing in particular – there are a large variety of handicrafts produced in the developing world, and especially Africa, but a lot of crafts are not distributed in such a way as to create revenue for artists.

In Rwanda, I saw crafts – they were making something that was world class, but no market was available.  I also noticed that they were really struggling to support their families.  I met women who were survivors of genocide, who had 4 or more kids – to think they have this incredible skill, and yet it goes unrewarded.  I identified it as a critical need.

How does Indego Africa offer a solution to that problem?

On the micro-level it’s a question of how handicrafts can work for these artists.  The way we solve the issue of not reaching the market is we act as a traditional commercial entity.  We bring products to the US, import, export, take care of customs, and do the sales and marketing.  We do the sort of fulfillment that otherwise women are unable to do.  We do it for them, and it requires a particular expertise we have.

On the second and more macro level, that of breaking the traditional aid dependence, first we give them income through their own initiative.  We pay them with money that they earned.  And secondly, we run long term skills training for them in entrepreneurship, literacy, and many other areas.  It may be similar to what’s been done with other aid organizations but there’s an important twist – 100% of profits are then given back to the co-ops and then administered by our team to conduct those training programs.  Every time they’re receiving training, their money is invested in that.  So we see greater enthusiasm and greater ownership.

Can you further explain what you mean by returning 100% of the profits?

100% of our profits are repatriated to Rwanda.  We tell the women that this much is available for training.  Then we have a conversation of what they’d like to learn to improve their existing business or take it to the local economy.  Additionally, we work with the program Orphans of Rwanda, which gives scholarships to orphans who are the head of their household.  We hire their scholars as interns for our program to administer the training program.  And the rest of the profit is redistributed to the women artisans.

Matt, many aspiring entrepreneurs have trouble taking their project from nothing to something – from a nebulous idea to a real entity making change.  What was your first concrete step in going from concept to reality?

I spent three years as a practicing attorney.  All the while, germinating for me was an idea about how we could transform how aid is practiced in Africa.  And I have particular interest in Africa having lived in Nigeria for six years as a child, so certainly the images of poverty were at the forefront of my mind.  But there’s also people committing themselves, to have the opportunity to improve their station in life.

There’s the prism that I’m looking through.  Then I developed a suite of skills as an attorney.  And then the idea starts eating away at you.  I found myself looking at academic literature, and reading about what’s been put into practice.

The first step was walking into my boss’s office, and saying that I’m leaving to start a nonprofit.  We started with no money.  A lot of organizations start with a fiscal sponsor.  We started with an idea and everything from there was built organically.  I started the day after our walkout of the office.  Simply to walk away from—

You said ‘our walkout.’  Did you leave, or did people leave with you?

At first it was just me.  I certainly had solicited some guidance and initial support.  My father had a lot of business experience in Africa, and I pushed to get him on board on the financial end, and we had an initial board of directors of people committed to our mission.

So how did you formulate that initial team?

I think everyone sort of draws on their existing personal and professional network.  That’s a natural thing to do.  But you start out without knowing who’s going to be a real asset and who’s not.  And sometimes you’re surprised, because some of your peripheral friends and colleagues are like – this is what I’ve been waiting for.

There’s no substitute for spreading as wide a net as you can whether networking or through a social media presence.  At first, the people to contribute the most are friends, family and colleagues.  In the second stage, when you know things are working, perfect strangers come up to you.  The biggest challenge is getting to a funding level where you’re employing people for their work.  Before that you’re relying on people’s good will.

How do you maintain that good will?

Well, I think people are impressed by and inspired by your own personal story, but also by the triumphs of the organization and the people you work with.  You have to get those first few successes.  Once you do that, you get a bit of a snowball effect.  Eventually you get volunteers and internship programs, but that takes time.  So in the meantime, you’ve got to do what you know is right.  Once you get a little success, people take a more concerted interest.

What was that first major success that gave people the confidence to join your organization?

There are probably a few.  But one of the firestones was when you arrive in a country and sign a partnership agreement – then you know you’re on the hook.  But then you also have something to talk about.  To say [to potential donors and customers], when you buy handicrafts, this is what you’re supporting.

The second big one was when we brought on Orphans of Rwanda because all of a sudden you’re empowering these really inspiring orphans – on a lean budget.

The third one was we brought on a big law firm in New York, Orrick, Herrington, and Sutcliffe.  At first it was a legal arrangement, but eventually they loaned us at first one employee and then two employees fulltime.

Did you have a personal relationship with them beforehand?

One was a friend from college.  She went to Rwanda, and had a moving and life-changing experience.  When she returned she asked her boss to provide our organization with some support, and it ballooned from there.  I think it comes down to the fact that when you do good things, eventually people take notice.

What was it like getting funding for your endeavor?

Initially the problem was that it wasn’t good enough to find someone who had $100,000 lying around who could spearhead that initial capital.  We didn’t have that, and that was a major hurdle.  We identified – and this is integral to the model – a need to have multiple revenue streams.  Sales of products.  Generating donations from individuals.  It was mostly from family and friends at the beginning but we were also applying for some grants – not so successfully without track records – and we entered business plan competitions.  We won the Skandalaris award, worth $20,000, and things like that were very helpful.  The model is good at generating revenue from multiple sources.

When you got fundraisers, did they come from your personal network as well?

Our fundraisers consist of our regional board of directors.  Right now we have five [regional boards].  Essentially what we do is we recruit two or three people who we know are really committed.  Then we ask them to each recruit three more people who are really committed.  Now in New York we now have 30 to 40 members and in Washington, DC as well.  At this point in our history, these people plan the fundraising networks.  So their network becomes Indego’s network.

In terms of making your business sustainable, what percentage of your revenues comes from grants and fundraising versus from the business itself?

The sale of goods portion, the handicraft portion, last year was 37% and our target was 40%.  The remaining 60% is all variety of giving.  So now you have individuals, foundations, fundraisers, grants, within that category.  Fundraisers now represent 50% of that, so a much bigger chunk.  Individual giving is about 35 to 40%, and at the moment foundation fundraising is about 10%.

I wonder how getting such a high percentage of revenues from giving integrates with your plans to scale your enterprise.  Would you mind elaborating?

That’s a good question.  Harvard Business School is actually addressing this question in a study.  Our strategy is broadly that we need to reach one or two types of donors, and get some impact funding.  In 2010, we need to either recruit a large buyer of handicrafts, whether a department store, national chain, getting on Oprah.  Absent that, or in addition to that, we need an impact donor of some kind.  Someone that says – this is a model I believe in.

We have a social impact report.  We need someone to say – that’s an organization I want to invest in, to the tune of $50,000 to $100,000 a year for three years.  If that happens, we’ll be effective.  I think a mix of revenue is important to us because sales is important on the front end, giving women income, but donations do something that a typical organization doesn’t do as they support skills training to keep the women invested.  Our primary goal is to make women individual businesswomen, able to start their own business through micro-finance, or able to find employment in the local economy.

Have you seen women take micro-loans and then go independently?

We haven’t seen it yet, but the programs we’re running are being effective.  We training women in entrepreneurship, in business planning, and identifying local market demand.  We’re just starting to cover those modules.

Are you seeing use of technology at all?

We are seeing it to a degree.  Women have cell phones, and we don’t see much in the way of cell phone banking, though we’re working with them on that.  We’re talking about people with low education and literacy levels, and so we’re running IT and computer training programs as well, to get them comfortable with technology.

Where do you see yourself in 5 years?

In terms of funding, we’d like to be the preeminent organization working in the handicraft space in Africa.  That means a lot of things.  It means we’ve established ourselves as a trusted brand name, and people trust both our social component as well as the design.  And we’re helping women start their own businesses and earn their own money.  We aim to expand in Rwanda in 2010, and by mid-to-late 2011 into other countries.  By 2015 we’d like to be in at least two or three others.

I had a chance to look over the presentation you gave to the Skandalaris Foundation.  In it, you cited a unique relationship you have with the government.  Could you elaborate?

Well one of the reasons we chose Rwanda is because they have a really good business environment and climate.  In meeting with the government they said, if you’re willing to make an investment, we’ll help you any way we can.  We got district governments to sign an agreement, and even take on basic obligations like handling co-op and legal disputes and district wide training. Just the fact that they’re agreeing to do it is a huge success, and we haven’t needed their assistance for the most part.

Has a partnership like that happened with other organizations, or it is pretty unique to you?

At the level we’re working with them, it’s unique and unusual, particularly with the handicrafts industry.

Can you tell me about the process of forming these local partnerships?

First you need a keen understanding of what it’s like to be in their shoes, so you can anticipate some of the issues they’re going to have as your partner and build trust.  You can only do this once you have experience.  That meant spending time doing what they do, and understanding their families and their history, so you build that trust.  There are going to be limits on communication.

With respect to anticipating issues they’d have, we know that in many places in Africa, they expect that white people are coming here, and they’re going to give us things, and we don’t need to do anything to receive them.  Anytime there are costs involved, we tend to split those costs.  For example, co-ops have their own rent to pay.  We split the cost with them, because the feeling is that the women have a real investment in their own success.  A financial investment – perhaps $20 per month, but psychological as well.  If they don’t have the psychological investment, that’s a problem we identified early on so we made that a condition of a partnership.

Second, they have to see an initial benefit to working with you.  We did that by buying the products and working with them on pricing.  We’re committed to finding out what daily costs are like.  If the cost of product is less than what it costs them to live, it’s not really fair, so we work with them on how much to price their items.  It’s huge for trust building.  As for hiring Rwandan people, it took a lot of asking around, getting to know people in the community, as well as a family friend from Rwanda who introduced us to contacts.

The issue of poverty is obviously a global one.  Your organization seems to have created a system for systematically reducing it through the empowerment of women in Africa.  Have you been approached about expanding the model to poor regions of Latin America or Asia?

We haven’t seen that too much with other regions.  We get approached all the time in Africa, and particularly in Rwanda, but unfortunately we haven’t seen that with other regions.

What has been the most rewarding part of your work with Indego Africa?

Certainly.  It’s when you go to the limit.  One woman named Daphrose, she’s someone that strikes you as outgoing, and gregarious.  You’re not always sure why, but when you learn her history – she lost her family, her husband and eight children.  But she still has this extraversion about her.  The women are just inspiring.

Where can I buy Indego Africa products?

By far the best place is to go on our website.  http://shop.indegoafrica.org.  You can see videos of the women making the handicrafts, and all of them are signed and have their name on them.

If you are interested in supporting Indego Africa’s efforts at reducing poverty in Rwanda through empowering women entrepreneurs, you can contact Matt Mitro at mattmitro [at] indegoafrica [dot] org.  For more information, please visit their website at IndegoAfrica.org.  You can follow Indego on Twitter, Facebook, or their blog Social Enterprising by following the links in this post.